A Syrian opposition supporter in Aleppo celebrates the end of Bashar Al Assad's rule on Sunday. Reuters
A Syrian opposition supporter in Aleppo celebrates the end of Bashar Al Assad's rule on Sunday. Reuters
A Syrian opposition supporter in Aleppo celebrates the end of Bashar Al Assad's rule on Sunday. Reuters
A Syrian opposition supporter in Aleppo celebrates the end of Bashar Al Assad's rule on Sunday. Reuters


Syria's future is unclear. What's clear is Iran's declining influence in the Middle East


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December 08, 2024

Following the fall of the government of Bashar Al Assad, the question on the minds of those living in Syria and outside is, who will fill the political vacuum in Damascus?

The takeover of city after city in recent days by rebel groups led by Hayat Tahrir Al Sham, an organisation proscribed as terrorists by the UN, US and other entities, has raised concerns about the future of the country and of the region at large.

The leader of Hayat Al Tahrir, Ahmad Al Shara, formerly known by the nom de guerre Abu Mohammed Al Jawlani, has been cognisant of this fact and made efforts to rehabilitate his image. In recent days, he has given interviews to international news organisations, positioning himself as a Syrian national figure and distancing himself from his extremist past. Speaking to CNN, he even said that the Hayat Al Tahrir could be dissolved once its objective of removing Mr Al Assad’s government from power was achieved.

Whether Mr Al Shara, who has in the past been affiliated to ISIS and Al Qaeda, will succeed in his image makeover remains to be seen. Syria’s future, however, isn’t linked to just one individual.

Maintaining the state institutions has become a common goal among many actors both within the country and outside. It is worth noting that Mr Al Assad’s Prime Minister, Mohammad Al Jalali, has urged rebels and all citizens to protect these institutions. He has also promised co-operation with any new leadership chosen by its people.

If Mr Al Jalali’s plea is taken seriously by the many rebel groups on the ground – thereby averting further destabilisation of the country – it will provide some relief not just to Syria’s diverse population, but also to foreign powers that have been involved in the 13-year civil war – including the US and Russia.

This brings us to the question of where the various foreign players stand today.

Mr Al Assad’s exit is no doubt a major regression for Russia’s position on several levels – from losing its military bases to ending its presence in the Mediterranean and witnessing the decline of Moscow’s influence in the region, alongside the rise of Turkish and Israeli influence. So is the case for Iran, particularly in the context of its competing interests with the US and Israel.

The departing US President Joe Biden has been co-ordinating with president-elect Donald Trump over the recent developments in the Levant. They both appear to be on the same page regarding the need to reduce Iran’s influence in the region, in large part by aiding Israel in its mission to neutralise Tehran’s most significant asset – Hezbollah in Lebanon – and to deal crushing blows to its strategic capabilities.

Mr Trump has also seemingly not opposed undermining Russian influence in Syria, as it aligns with the US’s grand strategic interests. Moreover, Syria has for years served as a vital link for Iranian militias, and its geography was crucial to the so-called Persian Crescent project. To that extent, the exit of Tehran’s ally in Damascus will be a welcome development for Washington.

Israel, meanwhile, has been co-operating with Turkey by providing the necessary intelligence for Ankara-backed factions in Syria. Its primary aim has been to cut off Iranian military supplies to Lebanon through Syria. Nevertheless, there is a huge trust deficit between Israel and Turkey, bearing in mind that their relationship has often fluctuated in the past, particularly over the issue of Palestine.

However, what all these regional powers – winners as well as losers – are keen to avoid is Syria becoming a breeding ground for terrorism. Washington may have tacitly supported Ankara’s mission to eliminate Russian and Iranian influence in Syria, but it did not endorse support for extremist factions to overthrow the government in Damascus. For its part, Turkey has promised the US that it can help to rein in some of the extremist factions. However, these promises are not necessarily guarantees.

The fact of the matter is that the US, the world’s biggest superpower, is not in the driver’s seat of this speeding train. But Turkey is.

It is, therefore, incumbent upon Washington to use the leverage it has over its allies in the region to influence the developments on the ground to the extent they can – Turkey to Syria’s north and Israel to its south.

With Syria’s future looking uncertain over the next few days, weeks and months, one can’t help but wonder if much of this could have been avoided had the Assad government not made a series of mistakes.

If it had involved the opposition groups in the country’s governance structures and invested in serious reforms – as had been sought by the Arab League when it revoked its suspension of Syria last year – things would have been very different today.

Instead, the country finds itself at a murky crossroads, with little clarity over its future or that of the region, other than the long-term erosion of Iranian, Russian and Hezbollah influence.

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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